Alphabet, Google's parent company, said on Oct. 28 that sales at Google Cloud, the business that rents computing power and AI tools to other companies, rose 103 percent in a year, to $30.7 billion in the three months to Sept. 30. Over the same three months, Alphabet spent $51.4 billion on buildings and equipment, more than twice the $24.0 billion of a year earlier. That was also more than the $42.3 billion in cash its business brought in. In its previous quarterly report, Alphabet said that kind of spending went mainly to servers, network equipment and data centers.
Alphabet tracks the gap with a figure it calls free cash flow: the cash its business brings in, minus what it spends on buildings and equipment. It was minus $9.1 billion for the quarter, after minus $5.9 billion in the three months before, plus $10.1 billion in the first three months of 2026 and plus $24.6 billion in the last three months of 2025. In the quarter Alphabet borrowed $29.0 billion. It also spent nothing buying back its own shares, a common way companies hand cash to shareholders, after spending $11.5 billion on that a year earlier.
Alphabet says the cloud growth was led by growth in AI computing and AI tools for companies, as well as its basic cloud services. It says sales of TPU systems, computers built on the chips Google designs for AI work that it sells to other companies, were a meaningful part of it. Google Cloud's operating profit, what it earns from running the business before taxes and gains or losses on investments, rose to $11.1 billion from $3.6 billion a year earlier. Sundar Pichai, Alphabet's chief executive, said Google is working hard to bring more computing capacity online to meet the demand.
Alphabet's total sales rose 25 percent to $127.6 billion. Pichai said the Gemini app now has one billion monthly users, up from 950 million in July. Profit for its common shareholders fell 25 percent to $26.2 billion. Alphabet recorded an $8.7 billion loss on stakes it holds in other companies, which it says cut that profit by $6.7 billion; a year earlier it had a $10.7 billion gain on such stakes. Its profit from running the business rose 30 percent.
Alphabet's shares fell 10 percent in after-hours trading, according to a news report, which says the company's finance chief told analysts that Alphabet plans to raise its spending on buildings and equipment significantly in 2027, from the $195 billion to $205 billion it expects to spend this year, without giving a 2027 figure.
Alphabet's results do not say how much of Google Cloud's sales came from AI, or how much from TPU systems.